US dollar is falling because of US trasury department's weak dollar policy since the departure of Paul O'Neil in Bush's first term. Both Snow and now Polson have favored weak US$ to bring US economy back on track and they have been successful.
Despite higher oil prices, inflation is still tame and under control as Federal Reserve Board says. So, USA does not have to raise interest rates unlike they are doing in UK and Euro countries. This makes dollar less attractive to investors and the value falls.
This makes US companies operating in foreign markets more profitable and US attractive to tourists. It's a win-win situation for US.
You will see that Japan and China still trade at the same multiple with $ - just two other smart big economies with monetary policies like the US.
